BP reports fall in profits

Profits are down at BP.

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By :  ,  Financial Analyst

The share price of BP is slightly down this morning (February 4th) following the release of the latest financial results by the oil company.

BP announced that its underlying replacement cost profit for last year, a figure that strips out the effect of oil price movements, was recorded at $13.4 billion (£8.2 billion).

The firm also revealed in the results that its underlying replacement cost profit fell to $2.8 billion from $3.9 billion, leading to its stocks falling slightly in the early stages of trading this morning.

"Capital discipline is central to BP's strategy; making the right investment choices, sticking to our capital limits, and actively managing our portfolio in pursuit of long term value," said BP chief executive Bob Dudley.

BP added that it still expects to be able to sell off a further $10 billion worth of assets by the end of 2015 and confirmed the cost of the 2010 Deepwater Horizon oil spill in the Gulf of Mexico is now up to $42.7 billion, rising from the $42.5 billion figure released last year.

Asset sales

BP has funded compensation payouts for the disaster by selling off $38 billion worth of assets. Chief executive Tony Hayward lost his job at the company in the wake of the incident.

The result revealed by BP in the latest update for the third quarter was reported to be just above average analyst forecasts for $2.7 billion, but this did not prevent stocks from sliding today.

By 08:24 GMT the share price of the company was down by more than 1.5 per cent and falling quickly as the session gathered speed.

Shell recently released its fourth quarter results in a statement, with its earnings for the October-December period revealed to be approximately $2.9 billion.

This news led to stocks in the oil company – which is one of BP's major rivals in the industry – falling heavily. Chief executive officer Ben van Beurden admitted he expects better.

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